Current Developments in Corporate Inversions

摘要

The highly controversial "corporate inversion " strategy has become so abusive in recent years that it has triggered legislative and regulatory actions to curb it. The strategy stemmed from the many differences in the tax treatment of domestic transactions versus international transactions. This article explains how a corporate inversion strategy takes advantage of these disparities, and reveals the purposes that a corporate inversion is intended to achieve, such as dividend distribution from a controlled foreign corporation without paying U.S. tax and a lower tax rate in a foreign country.